Updated: Jan 28, 2020
Programmatic in-housing is the act whereby a media budget owner removes any third-party buying entity purchasing media on their behalf. The budget owner benefits by having an internal brand expert managing the buying in a 100% transparent environment that maximizes value and boosts ROI.
There’s a lot of debate over whether programmatic in housing works. Most people will take a side based on their ability to win or lose budget. The access to money has huge influence on your stance, it allows many to forget about what is right for the brand and impartial recommendations are conveniently left out of the equation. Agencies remain defensive when it comes to in-housing because they have the most to lose. While they’re looking for mutually beneficial solutions that allow them to hold onto the budgets longer, they have yet to develop a model that creates financial gain for both parties. In an article published on December 12, 2019, by Digiday entitled “Let them try it”, agency execs voice a clear example of their overzealousness that continues to turn off the brands they’ve represented for so long.
The article quotes a pompous agency leader who goes on to say. “These days when I hear a client wants to take things in-house, I sit back and laugh. Let them try it. I'll help them try it. They're going to come crawling back. They're finally figuring out why being an agency is so difficult. They'll come back."
Ego is nothing new in this industry and isn’t even the biggest problem of that statement. It’s the sheer lack of self-awareness of the years of unfair business practices that have gotten these agencies to the point where clients are considering in-housing. The days of overstaffed, unknowledgeable client accounts with archaic financial models are gone and no longer can agencies sit back and collect historically high margins.
Here are a few secret ingredients that all buyers should be aware of as they consider in-housing:
15-20% brand waste through padded rate negotiations
Undisclosed client rebates held by the media agency
30-40% brand waste through non-transparent outsourcing
In house requires careful planning and strategic road maps for it to be successful. It requires the experience of someone who has managed this tactic in the past to avoid pitfalls. The transition must be specific and transparent with your agencies and needs to be phased NOT immediate. Here are a few questions to ask yourself as you consider moving away from your agency to build more control and transparency:
Full or partial: Do you want to take all or some of your campaigns in-house?
Retention: Where will you source your talent from and what is their career path?
Billing: Do you have a current billing process that you can leverage, or will you still need the agency?
Internalizing programmatic can save money and increase ROI. As programmatic becomes increasingly important in advertising, many are looking to create their own in-house teams. In-housing programmatic effort can help you save on costs, increase ROI and keep control of your data. There are plenty of partners to choose from but we at Tech Recipes is the only partner with agency, brand and publisher experience. We remove our egos at the door and offer a fair price, likable staff and, above all, a 100% trusted and transparent relationship.